When “as-is” becomes a problem…

When “as-is” becomes a problem…

We’re under contract, having sold the house to the best of multiple offers.  The new owners have offered to accept the house in “as-is” condition.  However, one last test, independent of the buyer and seller remains:  the wood boring insect inspection.  The test determines that there is no evidence that a wood boring insect treatment has ever been done on the house.  The seller agrees to have the house treated, as a concession to the buyer who likely wouldn’t be able to get financing without it.  The treatment is to be done by the company who did the testing.  Their treatment protocol is to drill a series of holes around the front and back of the house (it’s an interior townhouse) and pump anti-wood boring insect chemicals into the holes. 

The front of the house has a cement patio, which looked like a piece of cement on slab construction.  The treatment team had not discovered that the front cement “patio” was actually the roof of a “coal cellar” which was now a room in the basement of the house.  They didn’t notice that they had drilled right through that ceiling and into the basement below.  One fellow was in front drilling holes and the next fellow was in line to pump the chemicals into what they thought was the ground in front of the house.  Fortunately, I was there and yelled, “Stop the chemicals!  Stop drilling!”  We discovered the chemicals dripping from the ceiling and into the room below.  What a mess!  The basic condition of the house had changed and our contract was at risk, not from our negligence but from conditions outside of our control.

I called the treatment company’s manager and asked him to come out to assess the damage and what they were prepared to offer to the buyer and seller for potential damage to the house and the terms of the “as-is” contract.  Because of the failed termite treatment, the house now had a substantial and difficult problem to resolve.  It was different from the way it was when the deal was struck and the way it is now.  Ouch!

The manager and the regional vice-president of the termite treatment company arrived and after a series of written assurances and product information and chemical treatment assurances that the chemicals could and would be cleaned up with no lasting damages, the buyer and seller agreed that the “fix” was sufficient and the warranties under the new circumstances were adequate.  The contract returned to stable and proceeded to settlement.